Judge Suspends Order Requiring Apple To Help FBI Unlock iPhone, But At A Cost

A U.S. Magistrate Judge suspended her Feb. 16 order that Apple help investigators unlock the iPhone used in the San Bernardino terror attack, according to The Wall Street Journal. The hearing was scheduled for Tuesday and has been indefinitely suspended. This decision defuses the conflict between the government and Apple, but it comes at a cost to Apple since it suggests there is a gap in its software. Apple had said there is no way to unlock the phone.

Since 2014, Apple has claimed it had no way to break into phones with the most recent versions of its software. In arguing against the government’s order to create a way to access the phone’s data, the company said doing so would endanger its customers’ privacy.
The court postponed the case Monday, saying it was investigating a way to get the information without help from Apple.

Edward McAndrew, a partner at the Ballard Spahr law firm and a former federal prosecutor, said the postponement suggests that what Apple feared already exists in some form, and it exists outside of the company.

Judge Suspends Order

U.S. Magistrate Judge Sherri Pym suspended her Feb. 16 order for Apple to assist investigators in unlocking the iPhone used by Syed Rizwan Farook, who with his wife killed 14 people in the Dec. 2 attack in San Bernardino, Calif.

The judge postponed the hearing indefinitely, defusing the conflict between the Justice Department and Apple that pitted security against privacy.

The FBI’s method for accessing the phone was not clear Tuesday. The government said an “outside party” brought the information. A government official said it was still testing the method but is hopeful it will be able to unlock the phone without assistance from Apple.

Theodore Boutros, Apple’s lawyer, urged the judge to revoke or suspend the order. He said the government indicated Apple did something wrong in creating its encryption and in objecting to the government’s order to unlock the phone.

Vacating the order would be premature since the new method might fail, said Tracy Wilkinson, an assistant U.S. Attorney. She said many people have offered assistance with alternate methods to unlock the phone, but none have succeeded.

FBI Could Gain A New Tool

Law enforcement has an interest to not only exploit vulnerabilities in the phone but to keep the information it uncovers out of Apple’s hands.

Casey Ellis, chief executive and co-founder of Bugcrowd, a cybersecurity firm, said the information will become another tool in the FBI’s surveillance arsenal until the vulnerability is fixed.

The government said it knows there is a possible gap in the software protecting the iPhones, but it isn’t saying anything more about it at present.

The main question in the case has been whether or not Apple has a responsibility to help law enforcement unlock the phone or whether law enforcement should help Apple protect its customers from iPhone vulnerabilities.

How To Breach The Phone

Security experts have hypothesized on how the iPhone could be breached. One possibility is that there is an undisclosed vulnerability in the software that the government can exploit, such as a “boot loader” code the iPhone uses to activate its iOS operating system.

Another possibility is that technicians could de-solder the encrypted memory chip, insert a test socket in place of the memory, then copy the encrypted data to memory chips, slide them into the test socked and guess Farook’s passcode. Guessing the passcode would take up to 10,000 guesses. The iPhone only allows 10 attempts, but the FBI could repeatedly load the data onto a flash chip to reset the counter. This system would cost $50,000 in equipment and take as little as two days, according to Daniel Kahn Gillmor, a technology fellow at the American Civil Liberties Union.

Another scenario would focus on an ion beam to probe the phone’s microprocessor, extract cryptographic information and use it to decrypt the phone’s data. This method would cost between $500,000 and $1 million and require several months.

Congressman Criticizes FBI

Rep. Ted Lieu, D-Calif., called the FBI’s actions extremely disconcerting since it filed the case against Apple before exhausting all its options, then asking to delay the hearing before knowing if the new method would work.

Lieu said there was a lack of due diligence, or the agency was not really interested in the iPhone and was using the tragedy to set a precedent.

A Justice Department official said the FBI continuously sought to access the phone’s data without Apple’s help but asked for the delay to test the newly proposed method.

Featured image from Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. (0 votes, average: 0.00 out of 5)You need to be a registered member to rate this.Loading...

4.3 stars on average, based on 6 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.

1 Comment

jon sebastiani

March 26, 2016 at 4:36 am

This is much ado about nothing. In my not so humble opinion I believe that the issue was that the FBI was coercing Apple to make a backdoor key usable on any iPhone. I would expect the the FBI to use some brute force methods to get at the data on the phones in question.

I think Apple should have taken the phone, retrieved the data and given it to the FBI. The spirit of the request would have been met, Apple would not have provided a one size fits all key. Problem solved.

Does anyone believe that the average hacker is going to steal your phone, remove parts, and then return the phone to hack their phone? Hacking the phone with hardware is always an option.

Leave a Reply

Coincheck Hackers Launder 40% of Stolen NEM Funds, Experts Say

The hackers behind Coincheck’s massive NEM heist have successfully offloaded 40% of the stolen funds, according to new research by Tokyo-based consultancy group L Plus. The successful money laundering campaign highlights the ongoing challenges authorities face in bringing cyber criminals to justice.

Hackers Launder NEM

Analysts at L Plus believe that roughly 200 million NEM tokens, worth $79 million, have already been laundered through the dark web. However, the hackers likely pocketed a much smaller amount amid ongoing efforts to blacklist the tokens.

Nikkei Asian Review reported Monday that Coincheck was targeted with “suspicious traffic” for weeks leading up to the Jan. 26 heist. Citing a person close to the investigation, Nikkei said the attackers hacked an employee email and stole a private key needed to transfer the NEM tokens to the desired accounts. L Plus indicated that the attacker must have repeatedly accessed the Coincheck server to obtain the private key.

When the hack took place, the stolen NEM tokens were worth more than $400 million. Today, they are worth less than half that amount. The identity of the attackers remains unknown to this day. However, authorities have speculated that North Korea may have been responsible for the attack.

Coincheck plans to resume operations this week following a government-mandated freeze on all trading activity.

Japan Boosts Oversight

The attack has prompted Japan’s financial regulators to step up their oversight efforts of the cryptocurrency market. Last week, regulators penalized seven exchanges after deeming their internal controls insufficient to deal with a cyber attack.

The FSA began conducting on-site inspections in late January following the Coincheck attack. Regulators have uncovered several issues, including a lack of customer protection measures and insufficient anti-money laundering controls.

Japan remains one of the most welcoming jurisdictions for cryptocurrency trading, but repeated attacks may prompt regulators to reconsider their relatively lax approach. Digital currency exchanges in Japan and elsewhere face a growing threat from cyber criminals looking to capitalize on the rising value of digital assets.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. (2 votes, average: 5.00 out of 5)You need to be a registered member to rate this.Loading...

4.5 stars on average, based on 230 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.

Skepticism Grows Over BitGrail’s Supposed $167 Million Hack

A relatively unknown cryptocurrency exchange by the name of BitGrail has informed its users of a coordinated cyber attack targeting Nano (XRB) tokens. However, the incident does not appear to be holding up to scrutiny after the founder of the exchange made an odd request to the developers of Nano shortly after discovering the alleged theft.

BitGrail Exchange Allegedly Compromised

The Italian exchange issued a notice to its clients last week informing them that 17 million XRB tokens were compromised in a cyber attack. The XRB token, formerly known known as Raiblocks, is valued at $9.80 at the time of writing for a total market cap of $1.3 billion. That puts the total monetary loss of the supposed heist at nearly $167 million.

Parts of the notice have been translated into English from the original Italian by Tech Crunch, a media company dedicated to startups and technology news. According to the agency, BitGrail has stated the following:

“… Internal checks revealed unauthorized transactions which led to a 17 million Nano shortfall, an amount forming part of the wallet managed by BitGrail… Today a charge about those fraudulent activities has been submitted to the competent authorities and now is under police investigation.”

The notice indicated that all transactions have been put on hold until authorities complete their investigation.

Very little is known about BitGrail, as it is not listed among the 183 exchanges whose volume is ranked by CoinMarketCap.

Suspicion Grows

Unlike other crypto heists, the circumstances surrounding the alleged BitGrail attack have been met with widespread suspicion. As David Z. Morris of Fortune rightly notes, this isn’t the first time BitGrail has suspended Nano withdrawals. The same thing happened in early January when the exchange halted not only Nano, but Lisk and CryptoForecast transactions as well.

The suspension was followed by an announcement that the exchange was taking measured steps to verify users and enforce anti-money laundering requirements. It was around this time that users became suspicious that BitGrail was going to cut and run with their tokens.

BitGrail founder Francesco Firano made an unusual request to the developers of Nano following the alleged attack: he asked them to fork their record, a move that would essentially restore the stolen funds.

Nano officially rejected the request on Friday, the day after Firano supposedly discovered the stolen coins. In a post that appeared on the Nano Medium page, the team said:

“We now have sufficient reason to believe that Firano has been misleading the Nano Core Team and the community regarding the solvency of the BitGrail exchange for a significant period of time.”

Last month, hackers made off with more than $400 million worth of NEM tokens stolen from Coincheck, a Japan-based cryptocurrency exchange. The coins have yet to be recovered and the perpetrators remain at large. In 2014, a cyber heist brought down Mt Gox, which was the world’s largest exchange.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. (1 votes, average: 5.00 out of 5)You need to be a registered member to rate this.Loading...

4.5 stars on average, based on 230 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.

Coincheck Hackers Are Trying to Sell Their Stolen NEM Coins

The hackers behind the biggest crypto heist of all time are attempting to sell their stolen coins, according to an executive at the NEM Foundation. The revelations are the latest in a four-day saga that has authorities still struggling to identify perpetrators or locate the account in receipt of the stolen funds.

Hackers Try to Profit

Jeff McDonald, Vice President of the NEM Foundation, said Tuesday that his organization had traced stolen XEM coins to an unidentified address. It was here that the thief tried to unload the stolen funds onto six online exchanges for the purpose of selling them. McDonald said the exchanges have since been notified.

It was not immediately apparent how many of the stolen coins were spent or even the whereabouts of the account. A spokeswoman at the NEM Foundation later said the attacker sent the cryptocurrency to several random accounts in 100-token increments.

Last Friday, the attackers made off with more than $400 million worth of NEM tokens from Japanese cryptocurrency exchange Coincheck. The monetary value of the heist has fluctuated several times over the past four days, reflecting regular price moves in NEM’s native XEM token. However, Coincheck said it would reimburse account holders at a rate of 81 U.S. cents per token, which reflects the average price between Jan. 26 and 27.

Coincheck has been fined administrative penalties for failing to secure client funds. It was later revealed by the executive management team that the exchange failed to implement basic security features, such as multi-signature capability and cold storage. Rather, the XEM tokens were held in accounts connected to the internet.

Although the NEM Foundation is trying to prevent the liquidation of stolen funds, MacDonald said the attackers will likely get away with some of the money. However, the likelihood that they spend all of it is virtually zero given the market’s underlying liquidity constraints.

NEM Price Volatility

News of the heist on Friday triggered significant volatility in the price of XEM and the broader cryptocurrency market. Following a brief recovery, XEM has declined steadily over the past three days, with prices reaching new six-week lows on Tuesday. The coin touched a session low of 79 cents on volumes of more than $32 million. At press time, the coin was worth a little more than 80 cents.

Even with the decline, NEM held on to tenth spot in the global cryptocurrency rankings based on market cap. The coin’s overall value remains well north of $7 billion, according to CCN.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. (3 votes, average: 4.33 out of 5)You need to be a registered member to rate this.Loading...

4.5 stars on average, based on 230 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.